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About Me

Born and brought up in Delhi, but from the age of 3 to the age of 8 in Amritsar and started school on holiday in Srinagar. Leaving Amritsar, at school for a year in Solan. Otherwise in Delhi, studying at J. D. Tytler School and Bharatiya Vidya Bhavan, then at St Stephen's College, where I eventually taught for 3 years. Then 3 years at North-Eastern Hill University, Shillong. Political exile from India in 1976. Lived/studied/worked in Scotland for 3 years, England for 16 years and Switzerland since then.

Wednesday, April 30, 2008

With inflation at around 7%, the future of the Congress-led coalition is uncertain. The coalition's leftists have due to apparently entirely unpatriotic reasons opposed the civilian nuclear deal with the US. However that deal is crucial for India's energy needs and for India's continued growth. From the US perspective, the deal may be to do with balance of power between China and India. From India's point of view, it is simply to do with survival and progress for the mass of our people.

Fortunately, the BJP seems now to be coming around to supporting the deal, so the UPA can presumably get the deal through with BJP support, even if the leftists continue opposing it.

We will see whether the BJP and/ or the leftists put the country's interests before party interests. If they put the country's interests first, they will back the deal. If they put party interests first, they will scupper the deal - and with it bring the country to a general election in which both the BJP and the leftists will hope ate least to increase their seats in parliament (and perhaps hope to come to power, even in some combination, probably). But it is at least equally possible that the country will be so fed up with BJP/ Leftist behaviour in such an event that Congress may well come to power on its own.
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Monday, April 28, 2008

mpepAt this time of the global credit crisis, for all who long to understand the relationship between that crisis on the one hand, and on the other hand, moral and spiritual matters, comes this relatively short, easy-to-understand yet profound book by one of the world's leaders:

SPIRITUAL ENTERPRISE (just published by Enterprise Books, New York and London) is by Theodore Roosevelt Malloch who is Chairman and CEO of The Roosevelt Group and Founder of the Spiritual Enterprise Institute. After a soaring career in econometrics and financial services, Dr. Malloch held Ambassadorial-level positions at the UN as well as in the US government, and now serves on numerous corporate, mutual fund, and not-for-profit boards.

Dr Malloch is generous (possibly over-generous at points) but also clear-sighted and direct in his evaluations: "The increasingly central place occupied by China in the world economy has made the questions raised in this book especially relevant. There is a tendency among those whom Schopenhauer would describe as "unscrupulous optimists" to see China's move towards a capitalist economy as announcing the country's emergence as a normal member of the republic of nations. Such people overlook the fact that "capitalism" cannot be secured merely by allowing private property and private investment. There must also be rule of law and the kind of guarantees offered to the individual that will permit free experiment, the transfer of knowledge and the critical response to government. Those conditions do not exist in China, and corporations that are nevertheless entering the Chinese market are faced with crucial moral problems that, without the guidance of faith, may be hard or impossible to overcome. We have witnessed this in the case of two quintessentially modern companies, allegedly devoted to the pursuit of free opinion and open information: Google and Yahoo. The first has found itself acquiescing in censorship; the second has even become complicit in surrendering dissidents to punishment by the Chinese state. These cases show us the confusions encountered by companies operating on purely secular principles (however admirable those principles may be) when entering a sphere of genuine moral trial. The great tension that lies at the heart of the liberal order - the tension between free opinion and moral restraint - suddenly comes to the surface and, without the spiritual guidance that I have been advocating in this book, (that tension) has a lamentable tendency to be resolved in favour of the tyrant".

These are remarkably blunt words from a former diplomat at the UN.

Dr Malloch's whole argument is possibly best summed up by the following adaptation by me of his concluding paragraph: "I do not deny that people, and companies, can be virtuous (even) if they lack faith. But...virtue endures and spreads because it is sustained by and through faith. The spiritual capital built up by previous generations (can be squandered, or it can be) borrowed and invested by others who do not have the faith to renew it, though at some point it surely must be renewed. This renewal of spiritual capital in the business sphere and its specific enterprises is what the faith-guided company achieves. In the new conditions created by the global economy, the informaiton revolution and the growth of smart technologies, it is more than ever necessary for all companies to be guided by (a) rich spiritual inheritance, as spiritual enterprises. For only in so doing will they realize (the) incomparable source of the certainties that they will need in order to succed in (the) highly competitive and interconnected international commerce that we have (created)".

For its unfashionableness, for its honesty and integrity, and for the elegance of its thought and expression, I thoroughly recommend this book. It is essential reading for everyone concerned about the issues of our age.
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The Euro is an inherently unstable currency which has been stress-tested only once or twice. My judgment is that the Euro will inevitably and very suddenly come under pressure soon, due to the diverging fortunes of the fairly solid northern part of the Continent and the rather more frothy east and south (as well as Ireland).

On the other hand, the dollar must be at or near the bottom (watch for the US authorities to intervene as soon as equity and/ or bond prices start being affected by the slide of the dollar - which can't be very far away).

BTW the pressure on the Euro will also lead to pressure on all emerging market economies, even those that have somehow weathered the crisis so far. So it is probably time to underweight those currencies as well.

How can emerging market economies come under pressure, you may wonder, when their natural resource commodities are riding so high?

My view is that we now have a bubble in oil, gas, and most natural resource commodities - and this bubble won't last long either.

The problem is: where will the next bubble be created? Around the globe, we have printed excess money since at least immediately after 9/11 (not to mention the fashion for increasing astronomies of leverage!), and all this money must be placed SOMEwhere: wherever the money goes, we have and will have a bubble, because the money is now travelling purely to speculative destinations without regard to fundamentals.

Indeed the excess supply of money has itself become the most fundamental factor creating bubbles and destablisation worldwide.

The proposals from the FSF and the Basel Committee are merely tinkering around the edges of the real problems facing the global economy today: because these institutions refuse to face the simple fact of the oversupply of money.
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